Firm started by Paul Allen's family office ventures into private credit

Cercano Management, an investment firm launched inside the family office of the late Microsoft Corp. co-founder Paul Allen, is entering the private credit arena.

"Cercano Management sees direct lending as its biggest growth area this year and plans to hire three people to help in the effort," Bloomberg reported.

Cercano, with $10 billion in assets under management, was spun out of the Allen family office, where it was called Vulcan Capital. It now manages on behalf of other ultrahigh-net-worth individuals and families in addition to the Allen estate and foundation. Investors in Cercano tend to have accounts of more than $100 million, according to Bloomberg.

In its latest 13F filing, Cercano reported that about 25% of its funds are in publicly traded securities, with its largest position in Microsoft, followed by Union Pacific Corp. In startup investments, Crunchbase data shows three investments so far in 2023, all in health care, and 22 investments overall.